Wyze pays $255k of tariffs on $167k of floodlights
67 comments
·May 1, 2025almosthere
I'm guessing a ton of new companies will pop up overnight in India, Taiwan, Vietnam, S Korea that simply purchase components from China and resell them to the US. Not exactly helping anyone.
oatmeal_croc
The interesting thing is that India already has high tariffs for goods coming from China, however this might be different for finished vs non-finished goods and for consumption vs re-export goods. The tariffs aren't cheap though. Iphones not manufactured in India and sold there are significantly more expensive due to all the tariffs.
spaceman_2020
Apple is shifting its production to India, but in reality, the phones are just assembled in India. All the components are made in China, shipped to India, where they are put together. China still captures 90% of the value
itake
I don't know the latest, but as of like 6-8 mo ago. India hasn't been able to produce much (anything?), despite having millions of dollars of Chinese equipment ready to be put into use.
chrisco255
$2.6B Foxconn factory in India is coming online in the next few days: https://www.ndtvprofit.com/technology/tata-plant-begins-ipho...
oatmeal_croc
Where do you get your information from?
whatevermom
This will happen in Cambodia. They are building a massive amount of factories near Sihanoukville where the Chinese goods will be stamped with « made in Cambodia » and shipped right away to the USA.
justinator
A Tariff Holiday in Cambodia you say?
heavy surf punk guitar squeals in
JSR_FDED
Straightforward circumvention like that isn’t allowed (I’m not saying it won’t work). The new companies you mention would only be entitled to thelower tariffs on the value they add to the product they buy from China.
aiiizzz
The executive order came with threats against any country doing that
megablast
Is it a country doing it??
Would a country be able to track that??
vijaybritto
Yeah and it has no effect because its done by companies not countries. This is gonna continue for a long time. Its an incredible time to be a middle man
timewizard
I thought a majority of Chinese businesses are state owned. Their neighbors understand the stakes though and have demonstrated eagerness to have low US tariff rates. I assume their customs agencies will be on the lookout for this relabeling strategy.
It's going to occur, as it already does occur, for all kinds of reasons, but it's not going to be as simple as you make it out to be. There is a limited capacity to perform this work meaning the costs may not even be competitive with the US tariff in the long run.
locallost
This is a known issue with tariffs, so "governments" are on the lookout for it. It's risky, and there are consequences if you get caught.
There were however reports of Chinese companies actually setting up production in e.g. Thailand. The products are more expensive then, so it doesn't actually change anything - at least it was like this before the introduction of the one billion gagillion tariffs.
chii
> This is a known issue with tariffs, so "governments" are on the lookout for it.
not just an issue with tariffs, but with sanctions.
Guess how many companies suddenly popped up in places like kazakhstan importing electronic components and other us-sanctioned products, and then selling it to russia.
miohtama
This already happened under Trump I administration. Now they are setting high tariffs on India, Vietnam, as well. Not sure whether it is to close this loophole or not.
voidUpdate
Could someone explain to an idiot like me what the benefit of this is to the americans?
number6
If they had bought American floodlights they had saved 255k in tarrifs. So if they had paid 200k for the floodlights they would have still been better of.
One could argue, that there might be no American Floodlight Company - well here is the incentive to build one.
Secondly the money isn't lost, it goes to the state. Like a tax, but it is called differently. With this 255k more the state can now subsidise the local floodlight industry.
If anything of the above comes to fruition... That's a different matter...
oatmeal_croc
Floodlight companies don't appear overnight. I suspect they won't appear at all, given the instability of the tariffs and the fact that the next President (or even the current one) could wipe them off, rendering their shiny new Floodlight factory completely useless overnight. This extends to any industry.
Tariffs need to be stable and updated with several months of advance notice - otherwise they don't serve their purpose.
herbst
> Secondly the money isn't lost, it goes to the state. Like a tax, but it is called differently. With this 255k more the state can now subsidise the local floodlight industry.
Is that what is planned? The US has a lot of dept internationally I assumed the additional money goes into paying that back, or at least stabilize the dollar somehow
thih9
Some people from the companies that will go bankrupt as a result of that will be able to find work assembling floodlights.
bgro
It harms 100% of Americans which means it harms the 50% of Americans who advocate for science, education, and health. Anything that causes any harm to this group in any way at any cost is what that other 50% wants and derives the benefit from.
timewizard
It offsets the cost of cheaper Chinese labor and material costs. With the goal of making "made in the USA" products price competitive where they were not before.
In the abstract this possibly makes more jobs in the USA for manufacturing these items. It also keeps the entire process conducted in US Dollars that stay entirely within our borders which is theoretically better for currency stability and value.
herbst
In Theorie of a crazy orange men and a spaced out tech billionaire
bananalychee
How much in retail value? I've seen a few small companies that have all their manufacturing operations in China pass on tariffs at cost transparently, and for those that have already adjusted to the current rates, the surcharge is much smaller than I expected (~30%), but I don't know how margins differ by sector.
pinkmuffinere
It does depend on industry, but I don’t think you should be too surprised by a 30% surcharge, and I have some math to illustrate!
Let’s assume that this 30% surcharge exactly matches the increased cost due to tariffs (I think 145%?). This would mean that 1.45*manufacturing_cost = 0.3*MSRP -> manufacturing_cost = 0.2*MSRP. The manufacturing cost is 20% of the end price. A higher surcharge would indicate that the manufacturing cost is a _higher_ percentage of the end price. Consider that they’ll also have costs due to shipping, returns, staffing, marketing, R&D, and they need profit on top. In that context, 20% seems quite reasonable to me.
Edit: you should expect to feel the highest percentage price increase in products that have become extremely commoditized, because they naturally have the tightest margins. Off the top of my head, I’m thinking toasters, microwaves, lamps, TVs, electronics cables, batteries, things like that
pavlov
So why not make them in the country? Let’s see…
If you start building a factory in the US now, it will take years and you’ll be paying high tariffs on the equipment, high tariffs on the raw materials, high wages for unexperienced workers… And all of this in a political environment so unstable that your investment might be pointless six months from now if/when the president flip-flops again.
World-class industrial strategy.
vfclists
Will they have to pay tariffs on the equipment they have to import to manufacture them here?
Timshel
I think the point is kind of moot.
I doubt they own any part of their manufacturing at the moment. Unless manufacturing already exists in the US (which I doubt here), I don't believe company this size has any chance to move manufacturing to the US
The GamerNexus video already mentioned elsewhere explore those issues: https://www.youtube.com/watch?v=1W_mSOS1Qts.
tpetry
For sure. The tariffs don‘t make a difference of finished products vs parts of a product.
therealfiona
They bricked my light bulbs that I bought a few years ago. I'd have more sympathy had they not locked me out from using them.
sleepyguy
Ryan Pertersen (Import Genius and now Flexport) said that if these tariffs continue on China, 80% of small and medium-sized businesses that buy from China will go bankrupt. Over 2 million jobs will be lost. He is not the only one calling for a small business Armageddon. The big corporations love it, companies like Apple got exemptions, it's why you don't here them freaking out.
Hope Wyze makes it through this, long-time customer, and their cameras are great.
TheOtherHobbes
Big corps love it because they're at the top of the food chain. But an extinction event is an extinction event. It just takes longer for the effects to work their way up.
Small businesses are 44% of US GDP. Losing even 10% of GDP would be very uncomfortable.
carabiner
In 2021, approx 500 years ago, Ryan tweeted out a series of measures intended to resolve a Long Beach port shipping jam. His measures did almost nothing and amounted to bluster and broscience. https://www.latimes.com/business/technology/story/2021-10-28...
He also doesn't understand the concept of commercial airliners avoiding military airspace: https://www.reddit.com/r/ATC/s/1bTyTpBsqb
inverted_flag
> https://xcancel.com/WyzeCam/status/1917662183036706849
They’re getting attacked in the replies.
Aurornis
The top voted comments I see are all supportive so far.
There are a lot of comments asking why they don’t move manufacturing to Seattle. This theme is common among people who don’t understand how manufacturing works right now: They don’t realize that a product like this has many different parts from different places, down to the dozens of little SMT capacitors. You can’t just move the factory and avoid tariffs because the parts still come from other places.
AnthonyMouse
> This theme is common among people who don’t understand how manufacturing works right now: They don’t realize that a product like this has many different parts from different places, down to the dozens of little SMT capacitors. You can’t just move the factory and avoid tariffs because the parts still come from other places.
This argument doesn't make a lot of sense.
Suppose your company only does final assembly. Then whatever the value add of final assembly is, that's how much of the tariffs you can avoid by moving your own factory. You can eliminate as much as comes from your own contribution to the cost of the product. Meanwhile the company that makes the capacitors can avoid the tariffs on their value add by moving the factory that makes the capacitors. The fact that these are two separate companies doesn't really change much. Each one can move the part that they do.
In fact, it actually helps. Suppose the capacitor company can't move for some reason, but the final assembly can. Well, then at least you can avoid the tariffs on final assembly instead of neither if they were both made by some conglomerate that refused to move either one. Not only that, suppose other companies make the capacitors in Japan as well as China, and then the company can do the final assembly in the US and avoid the tariffs on capacitors from China by buying the ones from Japan.
exmadscientist
I don't think there's enough manufacturing capacity in Seattle to absorb this. There are plenty of CMs here but they're small and midsized, not the big boys. And they're not in the habit of running mostly empty.
bigfatkitten
And they’re not the sort of places where you get boards for consumer electronics made. They’re doing microwave/high frequency boards for companies like Boeing.
spaceman_2020
This has been the most annoyingly infuriating part of the manufacturing conversation.
People simply don't understand the scale and complexity of modern supply chains. By one estimate, it will take $40T to move all of China's existing manufacturing capacity and supply chains to the US, and it will take 20+ years if you're really motivated.
People still think that order goes in and a factory makes the finished goods. In reality, individual parts can move across borders dozens of times before they're ready to be placed into a bigger product.
Heck, I remember reading that Ford cars built in Canada cross the Canada-US border 11 times before they're finished
wickedsight
I also find it interesting that there's this apparent idea that the US needs companies to move manufacturing to the US to improve... Something.
The US is 9th in GDP per capita and has a historically low unemployment rate. I really don't understand what problem they're trying to fix here.
JumpCrisscross
> can’t just move the factory and avoid tariffs because the parts still come from other places
Trump has already started blinking on the China tariffs. It would be madness to move operations in the midst of this chaos—you’d immediately be undercut by cheaper competition.
hshdhdhj4444
He’s already said they will reduce the tariffs on China. He insisted there will be some tariffs but 145% is too high and it will come down.
A company moving their production anywhere based on what the policy is right now would be foolish because the policy could change in the next 5 mins, but will almost certainly change within minutes if there are empty shelves.
carabiner
[flagged]
Antipodes456
So I manufacture cycling products from Taiwan + China, importing to US... he's paying 152% tariffs, on the cost price of the product. Previously would have been like 7% base, with maybe a 20% trade war tarriff added on.
So for back of napkin: $10 widget, selling for eg $40.
NORMALLY Product: $10, Shipping, storage etc: $10, Duties: $0.70, Marketing $10, Sale price: $40, Profit: $10
TRADE WAR Product: $10, Shipping, storage etc: $10, Duties: $15, Marketing $10, Sale price: $40, Profit: -$5
So to make even 15% profit, the price needs to increase from $40 to ~$52
So companies are either winding up and ditching their inventory in China (lose less), or if they can prices are going up 20+%. Inflation here we come
At that price they be losing a significant amount on this.
UPS has already laid off 20,000 people. There is about to be a tsunami of businesses winding up unfortunately (us included).
anigbrowl
This has been written about in so many articles and discussed so extensively on HN and many other forums over the last month that it's hard to believe your stated lack of knowledge.
Cerium
Higher, most goods don't have import taxes, or rates were less than 10 percent. Looks like the rates for wall mounted lights were previously 5 percent.
techpineapple
Feels like maybe the tariffs are working if they’re talking about moving their production stateside?
waxpancake
They said they’re looking to “move out of China,” but that almost certainly doesn’t mean the U.S. Probably India or Vietnam, maybe Turkey or Malaysia.
0_gravitas
And even if the factory where they're assembled is in the US, they still need to import the materials/components from...most likely not the US; that's why CyberPower is looking awfully grim atm, assembly in the states, but they won't be able to make the cost of the materials remotely worth it for that reason.
kalleboo
Their own reply to themselves is a gif of Robin Williams yelling "GOOD MORNING VIETNAM"
sam_goody
I have seen this comment a lot and don't understand it.
From the U.S.'s point of view there are two goals: increase manufacturing in the States, and reduce manufacturing in China.
Even if they don't choose the States, and even if things aren't near-shored, it is still a pretty big win for the administration, no?
Mashimo
If that was the goal, then why did Trump pull out of Trans-Pacific Partnership (TPP)?
As far as I understood it, it was meant to work closely with a lot of east Asias counties to counter the influence of China and to promote trade.
Now the US kinda pissed of a lot of those countries, and china stepped in to trade with them.
Timshel
Their answer to moving to the US:
> Obviously we’d love to move our factories back home to Seattle. We just need to figure out to make the rain in Seattle power an assembly line.
Similarly HYTE, mostly known for their PC cases, gives a remarkably detailed insight, both into their cost structure and how they are impacted by tariffs, in this video:
https://www.youtube.com/watch?v=1W_mSOS1Qts&t=1394s
They also address the question of moving their production to the US.